Exhibit 99.1

unionbankshares_image1a01.jpg


Contact:    Robert M. Gorman - (804) 523-7828
Executive Vice President / Chief Financial Officer

UNION BANKSHARES REPORTS FOURTH QUARTER AND FULL YEAR RESULTS

Richmond, Va., January 24, 2017 - Union Bankshares Corporation (the “Company” or “Union”) (NASDAQ: UBSH) today reported net income of $20.8 million and earnings per share of $0.48 for its fourth quarter ended December 31, 2016. The quarterly results represent an increase of $3.0 million, or 16.6%, in net income and an increase of $0.08, or 20.0%, in earnings per share from the fourth quarter of 2015. For the year ended December 31, 2016, net income was $77.5 million and earnings per share was $1.77, an increase of $10.4 million, or 15.5%, and $0.28, or 18.8%, respectively, compared to the results for the year ended December 31, 2015.

2016 was a year of growth and change for Union,” said John C. Asbury, president and chief executive officer for Union Bankshares Corporation. “With double digit gains in net income, earnings per share and loans for the year, the company showed impressive growth in 2016 and demonstrated the earnings power of the bank. Union made meaningful progress on its goal of achieving top tier financial performance by posting solid gains in our return on assets and return on tangible common equity profitability ratios from the prior year. Improving efficiency, along with diversifying the loan portfolio, growing core deposits to fund loan growth, and finalizing the work already underway to cross the $10 billion threshold will be focus areas for Union in 2017.

I also want to personally thank Billy Beale for his service and dedication to Union over the past 25 years and for the remarkably smooth leadership transition. The company is well positioned to continue to deliver long term shareholder value thanks to Billy's leadership and we look forward to his continuing contributions to the Company as a board member and an advisor going forward.

Select highlights for the fourth quarter and full year of 2016 include:
Net income for the community bank segment was $20.4 million, or $0.47 per share, for the fourth quarter, compared to $17.9 million, or $0.40 per share, for the same quarter in 2015. Net income for the community bank segment for the year ended December 31, 2016 was $75.7 million, or $1.73 per share, compared to net income of $67.3 million, or $1.49 per share for the year ended December 31, 2015.
The mortgage segment reported net income of $382,000, or $0.01 per share, for the fourth quarter, compared to a net loss of $90,000 in the fourth quarter 2015. Net income for the mortgage segment for the year ended December 31, 2016 was $1.8 million, or $0.04 per share, compared to a net loss of $202,000 for the year ended December 31, 2015.
Return on Average Assets (“ROA”) was 0.99% for the quarter ended December 31, 2016 compared to ROA of 1.00% for the prior quarter and 0.93% for the fourth quarter of 2015. Return on Average Tangible Common Equity (“ROTCE”) was 12.05% for the quarter ended December 31, 2016 compared to ROTCE of 12.00% for the prior quarter and 10.38% for the fourth quarter of 2015.
Loans held for investment grew $158.1 million, or 10.3% (annualized), from September 30, 2016 and increased $635.6 million, or 11.2%, from December 31, 2015. Average loans increased $180.4 million, or 12.0% (annualized), from the prior quarter and increased $601.7 million, or 10.7%, from the same quarter in the prior year.
Period-end deposits increased $121.0 million, or 7.7% (annualized), from September 30, 2016 and grew $415.6 million, or 7.0%, from December 31, 2015. Average deposits increased $105.1 million, or 6.8% (annualized), from the prior quarter and increased $404.6 million, or 6.9%, from the same quarter in the prior year.



During the fourth quarter of 2016, the Company issued $150.0 million of fixed-to-floating rate subordinated debt with a maturity date of December 15, 2026. The notes were sold at par resulting in net proceeds, after discounts and offering expenses, of approximately $148.0 million.

NET INTEREST INCOME

Tax-equivalent net interest income was $71.5 million, an increase of $2.0 million from the third quarter, driven by both higher earning asset balances and higher yields on earning assets. The fourth quarter tax-equivalent net interest margin increased 2 basis points to 3.78% from 3.76% in the previous quarter. Core tax-equivalent net interest margin (which excludes the 8 and 9 basis point impact of acquisition accounting accretion in the current and prior quarter, respectively) increased by 3 basis points to 3.70% from 3.67% in the previous quarter. The increase in the core tax-equivalent net interest margin was principally due to the 5 basis point increase in interest-earning asset yields offset by the 2 basis point increase in cost of funds. The increase in interest-earnings asset yields was primarily driven by higher loan yields in the current quarter.


The Company’s tax-equivalent net interest margin includes the impact of acquisition accounting fair value adjustments. During the fourth quarter, net accretion related to acquisition accounting increased $90,000, or 5.9%, from the prior quarter to $1.6 million for the quarter ended December 31, 2016 due to higher than expected acquired loan balance paydowns. The third quarter, fourth quarter, and full year of 2016 and remaining estimated net accretion impact are reflected in the following table (dollars in thousands):
 
Loan Accretion
 
Borrowings Accretion (Amortization)
 
Total
For the quarter ended September 30, 2016
$
1,338

 
$
181

 
$
1,519

For the quarter ended December 31, 2016
1,538

 
71

 
1,609

For the year ended December 31, 2016
5,218

 
458

 
5,676

For the years ending:
 
 
 
 
 
2017
4,657

 
170

 
4,827

2018
4,120

 
(143)

 
3,977

2019
3,320

 
(286)

 
3,034

2020
2,810

 
(301)

 
2,509

2021
2,236

 
(316)

 
1,920

Thereafter
8,461

 
(5,306)

 
3,155


ASSET QUALITY/LOAN LOSS PROVISION

Overview
During the fourth quarter, the Company experienced declines in nonperforming asset balances as well as in net charge-off levels from the prior quarter and the prior year. Past due loans levels were consistent with the prior quarter and down from the prior year. The loan loss provision decreased from prior periods due to lower levels of net charge-offs and improving credit quality metrics, while the allowance for loan loss increased from prior periods due to loan growth.

All nonaccrual and past due loan metrics discussed below exclude purchased credit impaired (“PCI”) loans totaling $59.3 million (net of fair value mark of $14.3 million).




Nonperforming Assets (“NPAs”)
At December 31, 2016, NPAs totaled $20.1 million, a decrease of $7.2 million, or 26.4%, from December 31, 2015 and a decline of $3.2 million, or 13.8%, from September 30, 2016. In addition, NPAs as a percentage of total outstanding loans declined 16 basis points from 0.48% a year earlier and decreased 6 basis points from 0.38% last quarter to 0.32% in the current quarter. The following table shows a summary of asset quality balances at the quarter ended (dollars in thousands):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2016
 
2016
 
2016
 
2016
 
2015
Nonaccrual loans, excluding PCI loans
$
9,973

 
$
12,677

 
$
10,861

 
$
13,092

 
$
11,936

Foreclosed properties
7,430

 
7,927

 
10,076

 
10,941

 
11,994

Former bank premises
2,654

 
2,654

 
3,305

 
3,305

 
3,305

Total nonperforming assets
$
20,057

 
$
23,258

 
$
24,242

 
$
27,338

 
$
27,235


The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2016
 
2016
 
2016
 
2016
 
2015
Beginning Balance
$
12,677

 
$
10,861

 
$
13,092

 
$
11,936

 
$
12,966

Net customer payments
(1,451
)
 
(1,645
)
 
(2,859
)
 
(1,204
)
 
(1,493
)
Additions
1,094

 
4,359

 
2,568

 
5,150

 
2,344

Charge-offs
(1,216
)
 
(660
)
 
(1,096
)
 
(1,446
)
 
(1,245
)
Loans returning to accruing status
(1,039
)
 
(23
)
 
(396
)
 
(932
)
 
(402
)
Transfers to OREO
(92
)
 
(215
)
 
(448
)
 
(412
)
 
(234
)
Ending Balance
$
9,973

 
$
12,677

 
$
10,861

 
$
13,092

 
$
11,936



The following table shows the activity in other real estate owned ("OREO") for the quarter ended (dollars in thousands):
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
2016
 
2016
 
2016
 
2016
 
2015
Beginning Balance
$
10,581

 
$
13,381

 
$
14,246

 
$
15,299

 
$
22,094

Additions of foreclosed property
859

 
246

 
501

 
456

 
234

Additions of former bank premises

 

 

 

 
1,822

Valuation adjustments
(138
)
 
(479
)
 
(274
)
 
(126
)
 
(4,229
)
Proceeds from sales
(1,282
)
 
(2,844
)
 
(1,086
)
 
(1,390
)
 
(4,961
)
Gains (losses) from sales
64

 
277

 
(6
)
 
7

 
339

Ending Balance
$
10,084

 
$
10,581

 
$
13,381

 
$
14,246

 
$
15,299


During the fourth quarter, the majority of sales of OREO were related to land and residential real estate.

Past Due Loans
Past due loans still accruing interest totaled $27.9 million, or 0.44% of total loans, at December 31, 2016 compared to $42.9 million, or 0.76%, a year ago and $26.9 million, or 0.44%, at September 30, 2016. At December 31, 2016, loans past due 90 days or more and accruing interest totaled $3.0 million, or 0.05% of total loans, compared to $5.8 million, or 0.10%, a year ago and $3.5 million, or 0.06%, at September 30, 2016.

Net Charge-offs
For the fourth quarter, net charge-offs were $824,000, or 0.05% on an annualized basis, compared to $1.2 million, or 0.09%, for the same quarter last year and $929,000, or 0.06%, for the prior quarter. For the year ended December 31, 2016, net charge-offs were $5.5 million, or 0.09%, compared to $7.6 million, or 0.13%, for the prior year.




Provision
The provision for loan losses for the current quarter was $1.5 million, a decrease of $536,000 compared to the same quarter a year ago and a decline of $923,000 compared to the previous quarter. The decrease in provision for loan losses in the current quarter compared to the prior periods was primarily driven by lower net charge-off levels and improving credit quality metrics. Additionally, a $250,000 provision was recognized during the current quarter for unfunded loan commitments, resulting in a total of $1.7 million in provision for credit losses for the quarter.

Allowance for Loan Losses
The allowance for loan losses (“ALL”) increased $650,000 from September 30, 2016 to $37.2 million at December 31, 2016 primarily due to loan growth during the quarter. The ALL as a percentage of the total loan portfolio was 0.59% at December 31, 2016, 0.59% at September 30, 2016, and 0.60% at December 31, 2015. The ALL as a percentage of the total loan portfolio, adjusted for acquisition accounting (non-GAAP), was 0.86% at December 31, 2016, a decrease from 0.90% from the prior quarter and a decrease from 0.98% from the quarter ended December 31, 2015. In acquisition accounting, there is no carryover of previously established allowance for loan losses, as acquired loans are recorded at fair value.

The nonaccrual loan coverage ratio was 372.9% at December 31, 2016, compared to 288.3% at September 30, 2016 and 285.3% at December 31, 2015. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers important in assessing the adequacy of the allowance for loan losses.
 
NONINTEREST INCOME

Noninterest income decreased $900,000, or 4.7%, to $18.1 million for the quarter ended December 31, 2016 from $19.0 million in the prior quarter, primarily driven by lower mortgage banking income of $578,000, lower insurance-related income of $151,000, declines in customer-related fee income of $116,000 primarily driven by lower letter of credit fees, and decreases in loan swap fees of $105,000.

Mortgage banking income decreased $578,000, or 18.0%, to $2.6 million in the fourth quarter compared to $3.2 million in the third quarter, related to decreased mortgage loan originations and fair value adjustments associated with the interest rate lock derivative. The fair value of the interest rate lock derivative declined $516,000 in the current quarter, compared to an increase of $64,000 in the prior quarter, as a result of lower levels of locked mortgage balances at year-end. Mortgage loan originations decreased by $11.3 million, or 7.2%, in the current quarter to $145.3 million from $156.7 million in the third quarter. Of the mortgage loan originations in the current quarter, 49.2% were refinances compared with 33.8% in the prior quarter.

NONINTEREST EXPENSE

Noninterest expense decreased $646,000, or 1.1%, to $56.3 million for the quarter ended December 31, 2016 from $56.9 million in the prior quarter. Salaries and benefits expenses declined by $451,000 primarily due to lower levels of incentive compensation expense. Other declines in noninterest expense were driven by $400,000 in branch closure costs incurred in the prior quarter, lower loan-related expenses of $379,000 due to lower appraisal expenses, reduced levels of professional fees of $242,000, and lower amortization of intangible assets of $101,000. These lower expenses were partially offset by approximately $900,000 in increased franchise tax expenses driven by a one-time tax credit recognized in the prior quarter related to the Company's investment in a historic rehabilitation project.

INCOME TAXES

The effective tax rate for the fourth quarter was 27.5% compared to 23.3% in the third quarter. The increase in the effective tax rate was primarily driven by a one-time tax credit recognized in the prior quarter related to the Company's investment in a historic rehabilitation project and proportionately higher levels of taxable income compared to tax-exempt income. The effective tax rate for the year ended December 31, 2016 was 25.7% compared to 25.8% in the prior year.





BALANCE SHEET

At December 31, 2016, total assets were $8.4 billion, an increase of $168.6 million from September 30, 2016 and an increase of $733.5 million from December 31, 2015. The increase in assets was mostly related to loan growth.

At December 31, 2016, loans held for investment were $6.3 billion, an increase of $158.1 million, or 10.3% (annualized), from September 30, 2016, while average loans increased $180.4 million, or 12.0% (annualized), from the prior quarter. Loans held for investment increased $635.6 million, or 11.2%, from December 31, 2015, while quarterly average loans increased $601.7 million, or 10.7%, from the prior year.

At December 31, 2016, total deposits were $6.4 billion, an increase of $121.0 million, or 7.7% (annualized), from September 30, 2016, while average deposits increased $105.1 million, or 6.8% (annualized), from the prior quarter. Total deposits grew $415.6 million, or 7.0%, from December 31, 2015, while quarterly average deposits increased $404.6 million, or 6.9%, from the prior year.

At December 31, 2016, long-term borrowings were $413.3 million, an increase of $153.4 million from September 30, 2016, as a result of $150.0 million of fixed-to-floating subordinated debt issued in the fourth quarter.

At December 31, 2016, September 30, 2016, and December 31, 2015, respectively, the Company had a common equity Tier 1 capital ratio of 9.72%, 9.78%, and 10.55%; a Tier 1 capital ratio of 10.98%, 11.07%, and 11.93%; a total capital ratio of 13.59%, 11.60%, and 12.46%; and a leverage ratio of 9.87%, 9.89%, and 10.68%.

The Company’s common equity to asset ratios at December 31, 2016, September 30, 2016, and December 31, 2015 were 11.88%, 12.12%, and 12.94%, respectively, while its tangible common equity to tangible assets ratio was 8.41%, 8.57%, and 9.20%, respectively.

During the fourth quarter of 2016, the Company declared and paid cash dividends of $0.20 per common share, an increase of $0.01, or 5.3%, compared to prior quarter and the same quarter in the prior year.

* * * * * * *

ABOUT UNION BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union Bankshares Corporation (NASDAQ: UBSH) is the holding company for Union Bank & Trust, which has 114 banking offices and approximately 185 ATMs located throughout Virginia. Non-bank affiliates of the holding company include: Union Mortgage Group, Inc., which provides a full line of mortgage products, Old Dominion Capital Management, Inc., which provides investment advisory services, and Union Insurance Group, LLC, which offers various lines of insurance products.

Additional information on the Company is available at http://investors.bankatunion.com.

Union Bankshares Corporation will hold a conference call on Tuesday, January 24th, at 9:00 a.m. Eastern Time during which management will review earnings and performance trends. Callers wishing to participate may call toll-free by dialing (877) 668-4908. The conference ID number is 49841348.

NON-GAAP MEASURES
In reporting the results of the quarter ended December 31, 2016, the Company has provided supplemental performance measures on a tangible or tax-equivalent basis. These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies.



FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact, are based on certain assumptions as of the time they are made, and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.  Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” “may,” “view,” “opportunity,” “potential,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events.  Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any projected future results, performance, or achievements expressed or implied by such forward-looking statements.  Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in:

changes in interest rates,
general economic and financial market conditions,
the Company’s ability to manage its growth or implement its growth strategy,
levels of unemployment in the Bank’s lending area,
real estate values in the Bank’s lending area,
an insufficient allowance for loan losses,
the quality or composition of the loan or investment portfolios,
concentrations of loans secured by real estate, particularly commercial real estate,
the effectiveness of the Company’s credit processes and management of the Company’s credit risk,
demand for loan products and financial services in the Company’s market area,
the Company’s ability to compete in the market for financial services,
technological risks and developments, and cyber attacks or events,
performance by the Company’s counterparties or vendors,
deposit flows,
the availability of financing and the terms thereof,
the level of prepayments on loans and mortgage-backed securities,
legislative or regulatory changes and requirements,
monetary and fiscal policies of the U.S. government including policies of the U.S. Department of the Treasury and the Board of Governors of the Federal Reserve System, and
accounting principles and guidelines.

More information on risk factors that could affect the Company’s forward-looking statements is available on the Company’s website, http://investors.bankatunion.com or the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 and other reports filed with the SEC. The information on the Company’s website is not a part of this press release. All risk factors and uncertainties described in those documents should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.





UNION BANKSHARES CORPORATION AND SUBSIDIARIES
KEY FINANCIAL RESULTS
(Dollars in thousands, except share data)
(FTE - "Fully Taxable Equivalent")
 
Three Months Ended
 
Year Ended
 
12/31/16
 
9/30/16
 
12/31/15
 
12/31/16
 
12/31/15
Results of Operations
 
 
 
 
 
 
 
 
 
Interest and dividend income
$
76,957

 
$
74,433

 
$
69,317

 
$
294,920

 
$
276,771

Interest expense
8,342

 
7,405

 
6,712

 
29,770

 
24,937

Net interest income
68,615

 
67,028

 
62,605

 
265,150

 
251,834

Provision for credit losses
1,723

 
2,472

 
2,010

 
9,100

 
9,571

Net interest income after provision for credit losses
66,892

 
64,556

 
60,595

 
256,050

 
242,263

Noninterest income
18,050

 
18,950

 
17,016

 
70,907

 
65,007

Noninterest expenses
56,267

 
56,913

 
54,476

 
222,703

 
216,882

Income before income taxes
28,675

 
26,593

 
23,135

 
104,254

 
90,388

Income tax expense
7,899

 
6,192

 
5,321

 
26,778

 
23,309

Net income
$
20,776

 
$
20,401

 
$
17,814

 
$
77,476

 
$
67,079

 
 
 
 
 
 
 
 
 
 
Interest earned on earning assets (FTE)
$
79,833

 
$
76,860

 
$
71,655

 
$
305,164

 
$
285,850

Net interest income (FTE) (1)
71,491

 
69,455

 
64,943

 
275,394

 
260,913

Core deposit intangible amortization
1,621

 
1,683

 
2,010

 
6,930

 
8,445

 
 
 
 
 
 
 
 
 
 
Net income - community bank segment
$
20,394

 
$
19,616

 
$
17,904

 
$
75,716

 
$
67,281

Net income (loss) - mortgage segment
382

 
785

 
(90
)
 
1,760

 
(202
)
 
 
 
 
 
 
 
 
 
 
Key Ratios
 
 
 
 
 
 
 
 
 
Earnings per common share, diluted
$
0.48

 
$
0.47

 
$
0.40

 
$
1.77

 
$
1.49

Return on average assets (ROA)
0.99
%
 
1.00
%
 
0.93
%
 
0.96
%
 
0.90
%
Return on average equity (ROE)
8.22
%
 
8.14
%
 
7.08
%
 
7.79
%
 
6.76
%
Return on average tangible common equity (ROTCE) (4)
12.05
%
 
12.00
%
 
10.38
%
 
11.45
%
 
10.00
%
Efficiency ratio
64.92
%
 
66.19
%
 
68.42
%
 
66.27
%
 
68.45
%
Efficiency ratio (FTE) (1)
62.84
%
 
64.38
%
 
66.47
%
 
64.31
%
 
66.54
%
Net interest margin
3.63
%
 
3.63
%
 
3.63
%
 
3.66
%
 
3.75
%
Net interest margin (FTE) (1)
3.78
%
 
3.76
%
 
3.76
%
 
3.80
%
 
3.89
%
Yields on earning assets (FTE)
4.23
%
 
4.16
%
 
4.15
%
 
4.21
%
 
4.26
%
Cost of interest-bearing liabilities (FTE)
0.57
%
 
0.52
%
 
0.51
%
 
0.53
%
 
0.48
%
Cost of funds (FTE)
0.45
%
 
0.40
%
 
0.39
%
 
0.41
%
 
0.37
%
Net interest margin, core (FTE) (2)
3.70
%
 
3.67
%
 
3.69
%
 
3.72
%
 
3.79
%
Yields on earning assets (FTE), core (2)
4.14
%
 
4.09
%
 
4.08
%
 
4.14
%
 
4.19
%
Cost of interest-bearing liabilities (FTE), core (2)
0.58
%
 
0.53
%
 
0.52
%
 
0.54
%
 
0.53
%
Cost of funds (FTE), core (2)
0.44
%
 
0.42
%
 
0.39
%
 
0.42
%
 
0.40
%
 
 
 
 
 
 
 
 
 
 
Per Share Data
 
 
 
 
 
 
 
 
 
Earnings per common share, basic
$
0.48

 
$
0.47

 
$
0.40

 
$
1.77

 
$
1.49

Earnings per common share, diluted
0.48

 
0.47

 
0.40

 
1.77

 
1.49

Cash dividends paid per common share
0.20

 
0.19

 
0.19

 
0.77

 
0.68

Market value per share
35.74

 
26.77

 
25.24

 
35.74

 
25.24

Book value per common share
23.15

 
23.18

 
22.38

 
23.15

 
22.38

Tangible book value per common share (4)
15.78

 
15.75

 
15.25

 
15.78

 
15.25

Price to earnings ratio, diluted
18.72

 
14.32

 
15.90

 
20.19

 
16.94

Price to book value per common share ratio
1.54

 
1.15

 
1.13

 
1.54

 
1.13

Price to tangible common share ratio
2.26

 
1.70

 
1.66

 
2.26

 
1.66

Weighted average common shares outstanding, basic
46,577,634

 
43,565,937

 
44,899,629

 
43,784,193

 
45,054,938

Weighted average common shares outstanding, diluted
43,659,416

 
43,754,915

 
44,988,577

 
43,890,271

 
45,138,891

Common shares outstanding at end of period
43,609,317

 
43,556,486

 
44,785,674
 
43,609,317

 
44,785,674



 



 
Three Months Ended
 
Year Ended
 
12/31/16
 
9/30/16
 
12/31/15
 
12/31/16
 
12/31/15
Capital Ratios
 
 
 
 
 
 
 
 
 
Common equity Tier 1 capital ratio (3)
9.72
%
 
9.78
%
 
10.55
%
 
9.72
%
 
10.55
%
Tier 1 capital ratio (3)
10.98
%
 
11.07
%
 
11.93
%
 
10.98
%
 
11.93
%
Total capital ratio (3)
13.59
%
 
11.60
%
 
12.46
%
 
13.59
%
 
12.46
%
Leverage ratio (Tier 1 capital to average assets) (3)
9.87
%
 
9.89
%
 
10.68
%
 
9.87
%
 
10.68
%
Common equity to total assets
11.88
%
 
12.12
%
 
12.94
%
 
11.88
%
 
12.94
%
Tangible common equity to tangible assets (4)
8.41
%
 
8.57
%
 
9.20
%
 
8.41
%
 
9.20
%
 
 
 
 
 
 
 
 
 
 
Financial Condition
 
 
 
 
 
 
 
 
 
Assets
$
8,426,793

 
$
8,258,230

 
$
7,693,291

 
$
8,426,793

 
$
7,693,291

Loans held for investment
6,307,060

 
6,148,918

 
5,671,462

 
6,307,060

 
5,671,462

Earning Assets
7,611,098

 
7,466,956

 
6,900,023

 
7,611,098

 
6,900,023

Goodwill
298,191

 
298,191

 
293,522

 
298,191

 
293,522

Amortizable intangibles, net
20,602

 
22,343

 
23,310

 
20,602

 
23,310

Deposits
6,379,489

 
6,258,506

 
5,963,936

 
6,379,489

 
5,963,936

Stockholders' equity
1,001,032

 
1,000,964

 
955,367

 
1,001,032

 
995,367

Tangible common equity (4)
682,239

 
680,430

 
678,535

 
682,239

 
678,535

 
 
 
 
 
 
 
 
 
 
Loans held for investment, net of deferred fees and costs
 
 
 
 
 
 
 
 
 
Construction and land development
$
751,131

 
$
776,430

 
$
749,720

 
$
751,131

 
$
749,720

Commercial real estate - owner occupied
857,805

 
857,142

 
860,086

 
857,805

 
860,086

Commercial real estate - non-owner occupied
1,564,295

 
1,454,828

 
1,270,480

 
1,564,295

 
1,270,480

Multifamily real estate
334,276

 
339,313

 
322,528

 
334,276

 
322,528

Commercial & Industrial
551,526

 
509,857

 
435,365

 
551,526

 
435,365

Residential 1-4 Family
1,029,547

 
999,361

 
978,469

 
1,029,547

 
978,469

Auto
262,071

 
255,188

 
234,061

 
262,071

 
234,061

HELOC
526,884

 
524,097

 
516,726

 
526,884

 
516,726

Consumer and all other
429,525

 
432,702

 
304,027

 
429,525

 
304,027

Total loans held for investment
$
6,307,060

 
$
6,148,918

 
$
5,671,462

 
$
6,307,060

 
$
5,671,462

 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
NOW accounts
$
1,765,956

 
$
1,635,446

 
$
1,521,906

 
$
1,765,956

 
$
1,521,906

Money market accounts
1,435,591

 
1,398,177

 
1,312,612

 
1,435,591

 
1,312,612

Savings accounts
591,742

 
596,702

 
572,800

 
591,742

 
572,800

Time deposits of $100,000 and over
530,275

 
528,227

 
514,286

 
530,275

 
514,286

Other time deposits
662,300

 
657,686

 
669,395

 
662,300

 
669,395

Total interest-bearing deposits
$
4,985,864

 
$
4,816,238

 
$
4,590,999

 
$
4,985,864

 
$
4,590,999

Demand deposits
1,393,625

 
1,442,268

 
1,372,937

 
1,393,625

 
1,372,937

Total deposits
$
6,379,489

 
$
6,258,506

 
$
5,963,936

 
$
6,379,489

 
$
5,963,936

 
 
 
 
 
 
 
 
 
 
Averages
 
 
 
 
 
 
 
 
 
Assets
$
8,312,750

 
$
8,153,951

 
$
7,624,416

 
$
8,046,305

 
$
7,492,895

Loans held for investment
6,214,084

 
6,033,723

 
5,612,366

 
5,956,125

 
5,487,367

Loans held for sale
43,594

 
42,755

 
35,402

 
36,126

 
40,524

Securities
1,202,125

 
1,218,552

 
1,149,817

 
1,202,692

 
1,143,816

Earning assets
7,514,979

 
7,354,684

 
6,845,071

 
7,249,090

 
6,713,239

Deposits
6,310,025

 
6,204,958

 
5,905,406

 
6,110,789

 
5,768,213

Certificates of deposit
1,192,253

 
1,181,936

 
1,196,127

 
1,177,732

 
1,231,593

Interest-bearing deposits
4,885,428

 
4,796,505

 
4,536,643

 
4,722,573

 
4,471,870

Borrowings
927,218

 
884,597

 
659,567

 
877,602

 
675,819

Interest-bearing liabilities
5,812,646

 
5,681,102

 
5,196,210

 
5,600,174

 
5,147,689

Stockholders' equity
1,005,769

 
996,668

 
998,590

 
994,785

 
991,977

Tangible common equity (4)
686,143

 
676,308

 
680,801

 
676,654

 
671,071







 
Three Months Ended
 
Year Ended
 
12/31/16
 
9/30/16
 
12/31/15
 
12/31/16
 
12/31/15
Asset Quality
 
 
 
 
 
 
 
 
 
Allowance for Loan Losses (ALL)
 
 
 
 
 
 
 
 
 
Beginning balance
$
36,542

 
$
35,074

 
$
33,269

 
$
34,047

 
$
32,384

Add: Recoveries
1,003

 
534

 
933

 
3,025

 
3,927

Less: Charge-offs
1,827

 
1,463

 
2,165

 
8,555

 
11,535

Add: Provision for loan losses
1,474

 
2,397

 
2,010

 
8,675

 
9,271

Ending balance
$
37,192

 
$
36,542

 
$
34,047

 
$
37,192

 
$
34,047

 
 
 
 
 
 
 
 
 
 
ALL / total outstanding loans
0.59
%
 
0.59
%
 
0.60
%
 
0.59
%
 
0.60
%
ALL / total outstanding loans, adjusted for acquisition accounting (5)
0.86
%
 
0.90
%
 
0.98
%
 
0.86
%
 
0.98
%
Net charge-offs / total average loans
0.05
%
 
0.06
%
 
0.09
%
 
0.09
%
 
0.13
%
Provision / total average loans
0.09
%
 
0.16
%
 
0.14
%
 
0.15
%
 
0.16
%
 
 
 
 
 
 
 
 
 
 
Total PCI Loans
$
59,292

 
$
62,346

 
$
73,737

 
$
59,292

 
$
73,737

 
 
 
 
 
 
 
 
 
 
Nonperforming Assets
 
 
 
 
 
 
 
 
 
Construction and land development
$
2,037

 
$
2,301

 
$
2,113

 
$
2,037

 
$
2,113

Commercial real estate - owner occupied
794

 
1,609

 
3,904

 
794

 
3,904

Commercial real estate - non-owner occupied

 

 
100

 

 
100

Commercial & Industrial
124

 
1,344

 
429

 
124

 
429

Residential 1-4 Family
5,279

 
5,279

 
3,563

 
5,279

 
3,563

Auto
169

 
231

 
192

 
169

 
192

HELOC
1,279

 
1,464

 
1,348

 
1,279

 
1,348

Consumer and all other
291

 
449

 
287

 
291

 
287

Nonaccrual loans
$
9,973

 
$
12,677

 
$
11,936

 
$
9,973

 
$
11,936

Other real estate owned
10,084

 
10,581

 
15,299

 
10,084

 
15,299

Total nonperforming assets (NPAs)
$
20,057

 
$
23,258

 
$
27,235

 
$
20,057

 
$
27,235

Construction and land development
$
76

 
$
610

 
$
128

 
$
76

 
$
128

Commercial real estate - owner occupied
35

 
304

 
103

 
35

 
103

Commercial real estate - non-owner occupied

 

 
723

 

 
723

Multifamily real estate

 

 
272

 

 
272

Commercial & Industrial
9

 
77

 
124

 
9

 
124

Residential 1-4 Family
2,048

 
2,005

 
3,638

 
2,048

 
3,638

Auto
111

 
28

 
60

 
111

 
60

HELOC
635

 
407

 
762

 
635

 
762

Consumer and all other
91

 
98

 
19

 
91

 
19

Loans ≥ 90 days and still accruing
$
3,005

 
$
3,529

 
$
5,829

 
$
3,005

 
$
5,829

Total NPAs and loans ≥ 90 days
$
23,062

 
$
26,787

 
$
33,064

 
$
23,062

 
$
33,064

NPAs / total outstanding loans
0.32
%
 
0.38
%
 
0.48
%
 
0.32
%
 
0.48
%
NPAs / total assets
0.24
%
 
0.28
%
 
0.35
%
 
0.24
%
 
0.35
%
ALL / nonperforming loans
372.93
%
 
288.25
%
 
285.25
%
 
372.93
%
 
285.25
%
ALL / nonperforming assets
185.43
%
 
157.12
%
 
125.01
%
 
185.43
%
 
125.01
%
 
 
 
 
 
 
 
 
 
 
Troubled Debt Restructurings
 
 
 
 
 
 
 
 
 
Performing
$
13,967

 
$
11,824

 
$
10,780

 
$
13,967

 
$
10,780

Nonperforming
1,435

 
1,452

 
1,921

 
1,435

 
1,921

Total troubled debt restructurings
$
15,402

 
$
13,276

 
$
12,701

 
$
15,402

 
$
12,701






 
Three Months Ended
 
Year Ended
 
12/31/16
 
9/30/16
 
12/31/15
 
12/31/16
 
12/31/15
Past Due Detail
 
 
 
 
 
 
 
 
 
Construction and land development
$
1,162

 
$
309

 
$
3,155

 
$
1,162

 
$
3,155

Commercial real estate - owner occupied
1,842

 
1,411

 
1,714

 
1,842

 
1,714

Commercial real estate - non-owner occupied
2,369

 
324

 
771

 
2,369

 
771

Multifamily real estate
147

 

 

 
147

 

Commercial & Industrial
759

 
567

 
1,056

 
759

 
1,056

Residential 1-4 Family
7,038

 
4,985

 
15,023

 
7,038

 
15,023

Auto
2,570

 
1,846

 
2,312

 
2,570

 
2,312

HELOC
1,836

 
2,600

 
2,589

 
1,836

 
2,589

Consumer and all other
2,522

 
1,713

 
1,167

 
2,522

 
1,167

Loans 30-59 days past due
$
20,245

 
$
13,755

 
$
27,787

 
$
20,245

 
$
27,787

 
 
 
 
 
 
 
 
 
 
Construction and land development
$
232

 
$
697

 
$
380

 
$
232

 
$
380

Commercial real estate - owner occupied
109

 
365

 
118

 
109

 
118

Commercial real estate - non-owner occupied

 

 

 

 

Commercial & Industrial
858

 
51

 
27

 
858

 
27

Residential 1-4 Family
534

 
6,345

 
6,774

 
534

 
6,774

Auto
317

 
239

 
233

 
317

 
233

HELOC
1,140

 
899

 
1,112

 
1,140

 
1,112

Consumer and all other
1,431

 
1,037

 
689

 
1,431

 
689

Loans 60-89 days past due
$
4,621

 
$
9,633

 
$
9,333

 
$
4,621

 
$
9,333

 
 
 
 
 
 
 
 
 
 
Alternative Performance Measures (non-GAAP)
 
 
 
 
 
 
 
 
 
Tangible Assets
 
 
 
 
 
 
 
 
 
Ending assets
$
8,426,793

 
$
8,258,230

 
$
7,693,291

 
$
8,426,793

 
$
7,693,291

Less: Ending goodwill
298,191

 
298,191

 
293,522

 
298,191

 
293,522

Less: Ending amortizable intangibles
20,602

 
22,343

 
23,310

 
20,602

 
23,310

Ending tangible assets (non-GAAP)
$
8,108,000

 
$
7,937,696

 
$
7,376,459

 
$
8,108,000

 
$
7,376,459

 
 
 
 
 
 
 
 
 
 
Tangible Common Equity (4)
 
 
 
 
 
 
 
 
 
Ending equity
$
1,001,032

 
$
1,000,964

 
$
995,367

 
$
1,001,032

 
$
995,367

Less: Ending goodwill
298,191

 
298,191

 
293,522

 
298,191

 
293,522

Less: Ending amortizable intangibles
20,602

 
22,343

 
23,310

 
20,602

 
23,310

Ending tangible common equity (non-GAAP)
$
682,239

 
$
680,430

 
$
678,535

 
$
682,239

 
$
678,535

 
 
 
 
 
 
 
 
 
 
Average equity
$
1,005,769

 
$
996,668

 
$
998,590

 
$
994,785

 
$
991,977

Less: Average goodwill
298,191

 
297,707

 
293,522

 
296,087

 
293,522

Less: Average amortizable intangibles
21,435

 
22,653

 
24,267

 
22,044

 
27,384

Average tangible common equity (non-GAAP)
$
686,143

 
$
676,308

 
$
680,801

 
$
676,654

 
$
671,071

 
 
 
 
 
 
 
 
 
 
ALL to loans, adjusted for acquisition accounting (non-GAAP)(5)
 
 
 
 
 
 
 
 
Allowance for loan losses
$
37,192

 
$
36,542

 
$
34,047

 
$
37,192

 
$
34,047

Remaining fair value mark on purchased performing loans
16,939

 
18,154

 
20,819

 
16,939

 
20,819

Adjusted allowance for loan losses
$
54,131

 
$
54,696

 
$
54,866

 
$
54,131

 
$
54,866

 
 
 
 
 
 
 
 
 
 
Loans, net of deferred fees
$
6,307,060

 
$
6,148,918

 
$
5,671,462

 
$
6,307,060

 
$
5,671,462

Remaining fair value mark on purchased performing loans
16,939

 
18,154

 
20,819

 
16,939

 
20,819

Less: Purchased credit impaired loans, net of fair value mark
59,292

 
62,346

 
73,737

 
59,292

 
73,737

Adjusted loans, net of deferred fees
$
6,264,707

 
$
6,104,726

 
$
5,618,544

 
$
6,264,707

 
$
5,618,544

 
 
 
 
 
 
 
 
 
 
ALL / gross loans, adjusted for acquisition accounting
0.86
%
 
0.90
%
 
0.98
%
 
0.86
%
 
0.98
%






 
Three Months Ended
 
Year Ended
 
12/31/16
 
9/30/16
 
12/31/15
 
12/31/16
 
12/31/15
Alternative Performance Measures (non-GAAP) continued
 
 
 
 
 
 
 
 
Net interest income (FTE) (1)


 


 


 


 


Net Interest Income (GAAP)
$
68,615

 
$
67,028

 
$
62,605

 
$
265,150

 
$
251,834

FTE Adjustment
2,876

 
2,427

 
2,338

 
10,244

 
9,079

FTE Net Interest Income (non-GAAP)
$
71,491

 
$
69,455

 
$
64,943

 
$
275,394

 
$
260,913

 
 
 
 
 
 
 
 
 
 
Mortgage Origination Volume
 
 
 
 
 
 
 
 
 
Refinance Volume
$
71,454

 
$
52,883

 
$
40,943

 
$
208,674

 
$
197,665

Construction Volume
10,621

 
20,760

 
12,394

 
68,026

 
74,885

Purchase Volume
63,249

 
83,014

 
59,702

 
263,571

 
267,572

Total Mortgage loan originations
$
145,324

 
$
156,657

 
$
113,039

 
$
540,271

 
$
540,122

% of originations that are refinances
49.2
%
 
33.8
%
 
36.2
%
 
38.6
%
 
36.6
%
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
 
 
 
End of period full-time employees
1,416

 
1,391

 
1,422

 
1,416

 
1,422

Number of full-service branches
114

 
115

 
124

 
114

 
124

Number of full automatic transaction machines (ATMs)
185

 
193

 
201

 
185

 
201


(1) Net interest income (FTE), which is used in computing net interest margin (FTE) and efficiency ratio (FTE), provides valuable additional insight into the net interest margin and the efficiency ratio by adjusting for differences in tax treatment of interest income sources.

(2) The core metrics, FTE, exclude the impact of acquisition accounting accretion and amortization adjustments in net interest income.

(3) All ratios at December 31, 2016 are estimates and subject to change pending the Company’s filing of its FR Y9-C. All other periods are presented as filed.

(4) Tangible common equity is used in the calculation of certain capital and per share ratios. The Company believes tangible common equity and the related ratios are meaningful measures of capital adequacy because they provide a meaningful base for period-to-period and company-to-company comparisons, which the Company believes will assist investors in assessing the capital of the Company and its ability to absorb potential losses.

(5) The allowance for loan losses ratio, adjusted for acquisition accounting (non-GAAP), includes an adjustment for the fair value mark on purchased performing loans. The purchased performing loans are reported net of the related fair value mark in loans, net of deferred fees, on the Company’s Consolidated Balance Sheet; therefore, the fair value mark is added back to the balance to represent the total loan portfolio. The adjusted allowance for loan losses, including the fair value mark, represents the total reserve on the Company’s loan portfolio. The PCI loans, net of the respective fair value mark, are removed from the loans, net of deferred fees, as these PCI loans are not covered by the allowance established by the Company unless changes in expected cash flows indicate that one of the PCI loan pools are impaired, at which time an allowance for PCI loans will be established. GAAP requires the acquired allowance for loan losses not be carried over in an acquisition or merger. The Company believes the presentation of the allowance for loan losses ratio, adjusted for acquisition accounting, is useful to investors because the acquired loans were purchased at a market discount with no allowance for loan losses carried over to the Company, and the fair value mark on the purchased performing loans represents the allowance associated with those purchased loans. The Company believes that this measure is a better reflection of the reserves on the Company’s loan portfolio.



UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
 
 
 
 
December 31,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 
Cash and cash equivalents:
 
 
 
Cash and due from banks
$
120,758

 
$
111,323

Interest-bearing deposits in other banks
58,030

 
29,670

Federal funds sold
449

 
1,667

Total cash and cash equivalents
179,237

 
142,660

Securities available for sale, at fair value
946,764

 
903,292

Securities held to maturity, at carrying value
201,526

 
205,374

Restricted stock, at cost
60,782

 
51,828

Loans held for sale, at fair value
36,487

 
36,030

Loans held for investment, net of deferred fees and costs
6,307,060

 
5,671,462

Less allowance for loan losses
37,192

 
34,047

Net loans held for investment
6,269,868

 
5,637,415

Premises and equipment, net
122,027

 
126,028

Other real estate owned, net of valuation allowance
10,084

 
15,299

Goodwill
298,191

 
293,522

Amortizable intangibles, net
20,602

 
23,310

Bank owned life insurance
179,318

 
173,687

Other assets
101,907

 
84,846

Total assets
$
8,426,793

 
$
7,693,291

LIABILITIES
 
 

Noninterest-bearing demand deposits
$
1,393,625

 
$
1,372,937

Interest-bearing deposits
4,985,864

 
4,590,999

Total deposits
6,379,489

 
5,963,936

Securities sold under agreements to repurchase
59,281

 
84,977

Other short-term borrowings
517,500

 
304,000

Long-term borrowings
413,308

 
291,198

Other liabilities
56,183

 
53,813

Total liabilities
7,425,761

 
6,697,924

Commitments and contingencies
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
Common stock, $1.33 par value, shares authorized 100,000,000; issued and outstanding, 43,609,317 shares, and 44,785,674 shares, respectively.
57,506

 
59,159

Additional paid-in capital
605,397

 
631,822

Retained earnings
341,938

 
298,134

Accumulated other comprehensive income
(3,809
)
 
6,252

Total stockholders' equity
1,001,032

 
995,367

Total liabilities and stockholders' equity
$
8,426,793

 
$
7,693,291





UNION BANKSHARES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
September 30,
 
December 31,
 
December 31,
 
December 31,
 
2016
 
2016
 
2015
 
2016
 
2015
Interest and dividend income:
 
 
 
 
 
 
 
 
 
Interest and fees on loans
$
68,683

 
$
66,190

 
$
61,880

 
$
262,567

 
$
247,587

Interest on deposits in other banks
67

 
65

 
30

 
244

 
94

Interest and dividends on securities:
 
 
 
 
 
 
 
 
 
Taxable
4,761

 
4,732

 
3,985

 
18,319

 
15,606

Nontaxable
3,446

 
3,446

 
3,422

 
13,790

 
13,484

Total interest and dividend income
76,957

 
74,433

 
69,317

 
294,920

 
276,771

Interest expense:
 
 
 
 
 
 
 
 
 
Interest on deposits
4,786

 
4,552

 
4,348

 
17,731

 
15,553

Interest on short-term borrowings
797

 
765

 
211

 
2,894

 
944

Interest on long-term borrowings
2,759

 
2,088

 
2,153

 
9,145

 
8,440

Total interest expense
8,342

 
7,405

 
6,712

 
29,770

 
24,937

Net interest income
68,615

 
67,028

 
62,605

 
265,150

 
251,834

Provision for credit losses
1,723

 
2,472

 
2,010

 
9,100

 
9,571

Net interest income after provision for credit losses
66,892

 
64,556

 
60,595

 
256,050

 
242,263

Noninterest income:
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
5,042

 
4,965

 
5,104

 
19,496

 
18,904

Other service charges and fees
4,204

 
4,397

 
3,957

 
17,175

 
15,575

Fiduciary and asset management fees
2,884

 
2,844

 
2,306

 
10,199

 
9,141

Mortgage banking income, net
2,629

 
3,207

 
2,185

 
10,953

 
9,767

Gains on securities transactions, net
60

 

 
813

 
205

 
1,486

Other-than-temporary impairment losses

 

 

 

 
(300
)
Bank owned life insurance income
1,391

 
1,389

 
1,163

 
5,513

 
4,593

Other operating income
1,840

 
2,148

 
1,488

 
7,366

 
5,841

Total noninterest income
18,050

 
18,950

 
17,016

 
70,907

 
65,007

Noninterest expenses:
 
 
 
 
 
 
 
 
 
Salaries and benefits
30,042

 
30,493

 
25,287

 
117,103

 
104,192

Occupancy expenses
4,901

 
4,841

 
4,832

 
19,528

 
20,053

Furniture and equipment expenses
2,608

 
2,635

 
2,856

 
10,475

 
11,674

Printing, postage, and supplies
1,126

 
1,147

 
1,154

 
4,692

 
5,124

Communications expense
887

 
948

 
1,153

 
3,850

 
4,634

Technology and data processing
4,028

 
3,917

 
3,647

 
15,368

 
13,667

Professional services
1,653

 
1,895

 
1,302

 
8,085

 
6,309

Marketing and advertising expense
1,946

 
1,975

 
1,375

 
7,784

 
7,215

FDIC assessment premiums and other insurance
1,403

 
1,262

 
1,346

 
5,406

 
5,376

Other taxes
1,592

 
639

 
1,553

 
5,456

 
6,227

Loan-related expenses
1,152

 
1,531

 
923

 
4,790

 
4,097

OREO and credit-related expenses
637

 
503

 
4,496

 
2,602

 
8,911

Amortization of intangible assets
1,742

 
1,843

 
2,010

 
7,210

 
8,445

Training and other personnel costs
923

 
863

 
844

 
3,435

 
3,675

Other expenses
1,627

 
2,421

 
1,698

 
6,919

 
7,283

Total noninterest expenses
56,267

 
56,913

 
54,476

 
222,703

 
216,882

Income before income taxes
28,675

 
26,593

 
23,135

 
104,254

 
90,388

Income tax expense
7,899

 
6,192

 
5,321

 
26,778

 
23,309

Net income
$
20,776

 
$
20,401

 
$
17,814

 
$
77,476

 
$
67,079

Basic earnings per common share
$
0.48

 
$
0.47

 
$
0.40

 
$
1.77

 
$
1.49

Diluted earnings per common share
$
0.48

 
$
0.47

 
$
0.40

 
$
1.77

 
$
1.49





UNION BANKSHARES CORPORATION AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Dollars in thousands)
 
 
 
 
 
 
 
 
Community Bank
 
Mortgage
 
Eliminations
 
Consolidated
Three Months Ended December 31, 2016
 
 
 
 
 
 
 
Net interest income
$
68,205

 
$
410

 
$

 
$
68,615

Provision for credit losses
1,668

 
55

 

 
1,723

Net interest income after provision for credit losses
66,537

 
355

 

 
66,892

Noninterest income
15,368

 
2,823

 
(141
)
 
18,050

Noninterest expenses
53,810

 
2,598

 
(141
)
 
56,267

Income before income taxes
28,095

 
580

 

 
28,675

Income tax expense
7,701

 
198

 

 
7,899

Net income
$
20,394

 
$
382

 
$

 
$
20,776

Total assets
$
8,419,625

 
$
93,581

 
$
(86,413
)
 
$
8,426,793

 
 
 
 
 
 
 
 
Three Months Ended September 30, 2016
 
 
 
 
 
 
 
Net interest income
$
66,605

 
$
423

 
$

 
$
67,028

Provision for credit losses
2,455

 
17

 

 
2,472

Net interest income after provision for credit losses
64,150

 
406

 

 
64,556

Noninterest income
15,589

 
3,501

 
(140
)
 
18,950

Noninterest expenses
54,353

 
2,700

 
(140
)
 
56,913

Income before income taxes
25,386

 
1,207

 

 
26,593

Income tax expense
5,770

 
422

 

 
6,192

Net income
$
19,616

 
$
785

 
$

 
$
20,401

Total assets
$
8,251,351

 
$
90,692

 
$
(83,813
)
 
$
8,258,230

 
 
 
 
 
 
 
 
Three Months Ended December 31, 2015
 
 
 
 
 
 
 
Net interest income
$
62,271

 
$
334

 
$

 
$
62,605

Provision for credit losses
2,000

 
10

 

 
2,010

Net interest income after provision for credit losses
60,271

 
324

 

 
60,595

Noninterest income
14,987

 
2,200

 
(171
)
 
17,016

Noninterest expenses
51,982

 
2,665

 
(171
)
 
54,476

Income (loss) before income taxes
23,276

 
(141
)
 

 
23,135

Income tax expense (benefit)
5,372

 
(51
)
 

 
5,321

Net income (loss)
$
17,904

 
$
(90
)
 
$

 
$
17,814

Total assets
$
7,690,132

 
$
57,900

 
$
(54,741
)
 
$
7,693,291

 
 
 
 
 
 
 
 
Year Ended December 31, 2016
 
 
 
 
 
 
 
Net interest income
$
263,714

 
$
1,436

 
$

 
$
265,150

Provision for credit losses
8,883

 
217

 

 
9,100

Net interest income after provision for credit losses
254,831

 
1,219

 

 
256,050

Noninterest income
59,505

 
12,008

 
(606
)
 
70,907

Noninterest expenses
212,774

 
10,535

 
(606
)
 
222,703

Income before income taxes
101,562

 
2,692

 

 
104,254

Income tax expense
25,846

 
932

 

 
26,778

Net income
$
75,716

 
$
1,760

 
$

 
$
77,476

Total assets
$
8,419,625

 
$
93,581

 
$
(86,413
)
 
$
8,426,793

 
 
 
 
 
 
 
 
Year Ended December 31, 2015
 
 
 
 
 
 
 
Net interest income
$
250,510

 
$
1,324

 
$

 
$
251,834

Provision for credit losses
9,450

 
121

 

 
9,571

Net interest income after provision for credit losses
241,060

 
1,203

 

 
242,263

Noninterest income
55,645

 
10,044

 
(682
)
 
65,007

Noninterest expenses
205,993

 
11,571

 
(682
)
 
216,882

Income (loss) before income taxes
90,712

 
(324
)
 

 
90,388

Income tax expense (benefit)
23,431

 
(122
)
 

 
23,309

Net income (loss)
$
67,281

 
$
(202
)
 
$

 
$
67,079

Total assets
$
7,690,132

 
$
57,900

 
$
(54,741
)
 
$
7,693,291





AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)
 
For the Quarter Ended
 
December 31, 2016
 
September 30, 2016
 
Average Balance
 
Interest Income / Expense
 
Yield / Rate (1)
 
Average Balance
 
Interest Income / Expense
 
Yield / Rate (1)
Assets:
 
 
 
 
 
 
 
 
 
 
 
Securities:
 
 
 
 
 
 
 
 
 
 
 
Taxable
$
749,059

 
$
4,761

 
2.53
%
 
$
768,608

 
$
4,732

 
2.45
%
Tax-exempt
453,066

 
5,302

 
4.66
%
 
449,944

 
5,302

 
4.69
%
Total securities
1,202,125

 
10,063

 
3.33
%
 
1,218,552

 
10,034

 
3.28
%
Loans, net (2) (3)
6,214,084

 
69,358

 
4.44
%
 
6,033,723

 
66,397

 
4.38
%
Other earning assets
98,770

 
412

 
1.66
%
 
102,409

 
429

 
1.67
%
Total earning assets
7,514,979

 
$
79,833

 
4.23
%
 
7,354,684

 
$
76,860

 
4.16
%
Allowance for loan losses
(37,808
)
 
 
 
 
 
(35,995
)
 
 
 

Total non-earning assets
835,579

 
 
 
 
 
835,262

 
 
 
 
Total assets
$
8,312,750

 
 
 
 
 
$
8,153,951

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Transaction and money market accounts
$
3,099,424

 
$
1,804

 
0.23
%
 
$
3,016,337

 
$
1,682

 
0.22
%
Regular savings
593,751

 
201

 
0.13
%
 
598,232

 
207

 
0.14
%
Time deposits
1,192,253

 
2,781

 
0.93
%
 
1,181,936

 
2,663

 
0.90
%
Total interest-bearing deposits
4,885,428

 
4,786

 
0.39
%
 
4,796,505

 
4,552

 
0.38
%
Other borrowings (4)
927,218

 
3,556

 
1.53
%
 
884,597

 
2,853

 
1.28
%
Total interest-bearing liabilities
5,812,646

 
8,342

 
0.57
%
 
5,681,102

 
7,405

 
0.52
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
1,424,597

 
 
 
 
 
1,408,453

 
 
 
 
Other liabilities
69,738

 
 
 
 
 
67,728

 
 
 
 
Total liabilities
7,306,981

 
 
 
 
 
7,157,283

 
 
 
 
Stockholders' equity
1,005,769

 
 
 
 
 
996,668

 
 
 
 
Total liabilities and stockholders' equity
$
8,312,750

 
 
 
 
 
$
8,153,951

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
 
$
71,491

 
 
 
 
 
$
69,455

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate spread (5)
 
 
 
 
3.66
%
 
 
 
 
 
3.64
%
Cost of funds
 
 
 
 
0.45
%
 
 
 
 
 
0.40
%
Net interest margin (6)
 
 
 
 
3.78
%
 
 
 
 
 
3.76
%
 
 
 
 
 
 
 
 
 
 
 
 
(1) Rates and yields are annualized and calculated from actual, not rounded, amounts in thousands, which appear above.
(2) Nonaccrual loans are included in average loans outstanding.
(3) Interest income on loans includes $1.5 million and $1.3 million for the three months ended December 31, 2016 and September 30, 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.
(4) Interest expense on borrowings includes $71,000 and $181,000 for the three months ended December 31, 2016 and September 30, 2016, respectively, in accretion of the fair market value adjustments related to acquisitions.
(5) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.
(6) Core net interest margin excludes purchase accounting adjustments and was 3.70% and 3.67% for the three months ended December 31, 2016 and September 30, 2016, respectively.